The Office of the Telecommunications Authority is inviting views on its proposal to review the universal service obligation arrangements.

The purpose of the existing arrangements is to ensure that basic telephone services are available and affordable to all Hong Kong people on a non-discriminatory basis irrespective of where they live or do business.

PCCW-HKT Telephone is the only service provider being charged with the obligation to provide universal service in Hong Kong. It is compensated for the net cost it incurs in providing services to unprofitable customers and public payphones. The amount of universal service contribution for 2004 was $103.3 million.

Director-General of Telecommunications Au Man-ho said today the present regulatory framework has been in place since 1998. Although it was updated in 2000, the telecommunications market has since experienced rapid changes - more households are served by alternative network operators, declining profits in the IDD service and the emergence of new technologies such as voice-over Internet protocol (VoIP).

In view of the fast-changing telecommunications landscape, the existing regulatory framework may not be sustainable in its present form, Mr Au said. There is therefore a need to review it to ensure it keeps pace with the market and technological developments.

Other issues identified in the consultation paper include the scope of the universal service, how the cost for the universal service obligation should be assessed and whether competition should be introduced for the provision of the universal service.

Interested parties are invited to submit their comments by February 28. The paper can be downloaded from authority's website.